( I have to reply back to this class mate in 60 words) So ending receivable is 1,000,000. In this current situation, 80% of this is outstanding past ninety (90) days. So if my understanding is correct, $800,000 of this is still outstanding, and could turn into bad debt. For bank purposes, the owner is asking that we say only $30,000 may turn into bad debt. You see from experience, failing to carry out an instruction can land an employee with a warning letter on file. So my approach will be to ask for a month to work closely with the accounts department to find ways to reduce the receivables accounts. Methods like revamping the credit process to only approve persons with acceptable credit rating, to setting payment term at only net30 days, after which frequent phone calls will be made to aggressively go after receivable. Now in doing this and being successful will improve the company's cash flow and the owner will not require a bank loan and I will not have to break GAAP standards or refuse and received a reprimand. However, if the bank loan is still needed, the true picture of the accounts receivable will paint a more favorable picture of the company